Belize offshore secrecy ill at ease with UK politics and US authorities

How US tax inspectors fear firms and individuals are using Lord Ashcroft’s bank to hide assets and evade tax

It was a stern message David Cameron took with him on his visit to the Caribbean last September: “If we’re to beat corruption, we need transparency.” And some in the region – he did not name them – could do better.

“If we want to break the business model of people stealing money and hiding it in places where it can’t be seen: transparency is the answer.”

Just two weeks earlier, US tax investigators had revealed a major investigation into suspected evasion by customers of a group of companies in nearby Belize, one of the region’s most notorious secrecy havens.

Officials told a court in Florida they believed it “very likely” that the companies under scrutiny – including Belize Bank International (BBI) and Belize Corporate Services (BCS) – had been used by US citizens to hide assets and evade tax over a period possibly stretching back as far as 2006.

What makes this ongoing investigation awkward for the UK government is that these companies are owned by Lord Ashcroft, former deputy chair of the Conservative party. As one of the party’s most generous donors, he did more than anyone to bankroll David Cameron’s path to Downing Street in 2010. Five years earlier, he also injected funds into Theresa May’s election campaign when she was seen as being at risk of losing her Maidenhead seat.

There is no allegation that any of Ashcroft’s businesses evaded tax or knowingly helped others to do so. Nevertheless, US investigators have a thick file of past cases involving criminals, tax dodgers and their advisers, all of whom are said to have used Ashcroft’s Belizean companies to hide assets and dodge tax.

Many of the services offered by BBI and BCS, investigators say, may have appealed to those looking to hide assets. In its promotional brochure, for example, BBI advertises offshore banking for international customers, stressing “premier discretion, privacy and simplicity”.

The bank also offers services in conjunction with BCS, a sister company specialising in setting up and administering offshore companies. Investigators suspect tax evaders have been using BCS to set up companies to mask their ownership of bank accounts with BBI.

Services offered by BCS – which boasted of more than 16,400 offshore companies under its management – include virtual offices, nominee directors, company secretary services, mail-forwarding and remote access. All of these, US tax officials argue, are attractive to tax evaders.

On the homepage of its website, BCS previously listed six advantages of Belizean offshore companies, including “asset protection”, “tax minimisation” and “bank accounts and investments outside of an individual’s name”.

Elsewhere, under FAQs, the website explains: “Confidentiality is one of the many attributes of a Belize [offshore company]. No information pertaining to the identity of directors and shareholders is filed in any public register in Belize.”

A spokesman for Ashcroft told the Guardian it was not appropriate to put questions to him about his Belizean group of companies because he has not been involved as a director for many years.

He stood down as a director of the group’s holding company, Caribbean Investment Holdings (CIH), in 2011. CIH is listed on the London stock exchange but Ashcroft retains a stake of 75%.

A spokesman for CIH noted there were no allegations of wrong-doing against the group. Meanwhile, all relevant subsidiaries, including BBI, have said that – in compliance with US law – they regularly update American tax authorities on offshore accounts they provide for US citizens.

Even though CIH companies do not stand accused of breaking the law, the fact that their name appears at the heart of a major evasion investigation sat uneasily with Cameron’s crusade against corporate secrecy in offshore tax havens.

The US investigation has led to BBI and BCS being placed on a blacklist by American tax authorities. This list has 97 entries and includes many Swiss banks such as UBS and Credit Suisse. It names those firms either under investigation, cooperating with investigations or whose customers are under investigation.

Inclusion on the blacklist means US tax evaders wishing to own up to hidden assets and accept a fine now face much higher penalties if they use BBI or BCS to conceal their wealth.

Theresa May, Britain’s new prime minister, may also be embarrassed about a money trail from Belize to the Tory party. Around £5.4m of donations linked to Ashcroft have entered party coffers from a UK consultancy firm called Bearwood Corporate Services over many years. Some of the cash was directly targeted at ensuring the re-election of May, who Ashcroft had identified in secret polling as one of the most vulnerable Tory MPs. And where did Bearwood’s money come from? Between 2006 and 2011, it received £1.64m in fees from CIH companies.

Relations with Ashcroft soured in Cameron’s latter years at No 10 Downing Street.

The peer resigned from the House of Lords last year, citing other commitments and his bitterness was laid bare last October when he co-authored a biography of the prime minister that attracted attention for its salacious – and uncorroborated – retelling of alleged high jinks during Cameron’s student days. May, meanwhile, has remained on better terms with Ashcroft, reportedly making sure to attend his lavish 70th birthday celebrations last March.

Ashcroft, who backed Brexit, remains an influential figure in Tory politics through his polling operations and ownership of the website ConservativeHome.

If there were ever any doubts how he viewed the recent seismic political changes, it ended with a tweet last month. “Congratulations to the team at @ConHome (and its proprietor!!) for supporting Brexit and then immediately backing Theresa May …”